THINK FOR A MOMENT about all those people you know who invest in the stock market. Do any of them approach it even remotely in the same manner? There's that guy at your office — the one who tracks his holdings religiously and loves to bend your ear with his latest "hot" tip. And there's your next-door neighbor, who's done great with a couple of biotechs, but mainly sticks to blue chips and mutual funds. Then there's your college roommate, who puts all his money in an S&P 500 index fund and worries about it exactly one afternoon a year, in between lunch and washing the car. No two people invest exactly the same way. But happily, lots of people make money, regardless.
Based on data provided by Lipper.
The question is, what's your investment personality? This section will help you figure that out. We'll also assist you in choosing a set of investments that both match your temperament and fit into the asset-allocation plan you formulated in the last section. For each of the asset classes, our applet divides your choices into low-, medium- and high-maintenance investments. Which ones feel right to you will depend on your own inclination and expertise. Our asset-allocation system does give a nod to your risk tolerance and economic outlook. But it's really about creating a well-diversified investment program that takes into account the historical relationships between stocks, bonds and cash. Here we're more concerned with how much time and interest you plan to devote to your portfolio. That's the biggest factor in choosing specific stocks and bonds to fill your allocation. The more work you're willing to put in, the greater your potential returns. Our medium- and high-maintenance portfolios serve up greater portions of individual stocks, which require a lot more attention than funds. But choosing the low-maintenance route doesn't mean you'll have to put up with meager returns. All of our portfolios contain funds and other investments with above-average showings. The applet above works by letting you choose which asset class you're interested in and which investment style you think best suits you. Click on any of the pie pieces for a pop-up window of the SmartMoney fund choices in that asset class. Click on the fund symbol in the table for a snapshot with more information on that fund's performance and management style. The idea here isn't to force-feed you investments, but to let you peruse our picks and see what makes you comfortable. All would be appropriate for both taxable accounts and your IRA. If you're investing in your 401(k), of course, these funds may not be available to you. Visit our Retirement/401(k) section for advice on how to evaluate the investment choices your plan does offer.